Pantry Pride Lowers Offer For Revlon

Apparently in an effort to undercut Revlon Inc.`s ``poison pill`` anti- takeover measures, Pantry Pride Inc. said Friday it is lowering the amount it is willing to pay for Revlon`s shares.

The Fort Lauderdale company said it has ended its offer to buy any and all shares of Revlon common stock at $47.50 each and Revlon`s preferred stock at $26.67. Instead, Pantry Pride said it intends to begin a new cash tender offer to buy all outstanding Revlon common shares at $42 per share.

Revlon`s Roger Shelley had no comment on the change in Pantry Pride`s tender offer, and Pantry Pride officials could not be reached for comment. Pantry Pride`s move comes about a week before its hostile tender offer for Revlon Inc. stock was to expire. The new bid is worth about $1.6 billion, compared with nearly $2 billion with the previous offer.

Many analysts were puzzled by Pantry Pride`s new offer. Daniel Meade, who tracks Revlon for First Boston Corp. in New York, said he was ``mystified`` by the change and gave Pantry Pride`s new bid ``a 5 percent chance of being successful.``

Meanwhile, Ken Gassman, a Pantry Pride analyst with Wheat, First Securities in Richmond, Va., said ``the $42 bid is probably intended to undercut the poison pill if Revlon can`t service their debt. It reflects the apparent lessening in value of Revlon`s shares.``

Gassman added that, ``Logic does not always prevail in this game of acquisitions. If I were a Revlon shareholder, I wouldn`t know what to think.

Among other things, Pantry Pride`s new offer is conditioned on at least 90 percent of Revlon`s shares being tendered after the proper documents are filed with the Securities and Exchange Commission. However, the company reportedly said it will consider making an ``appropriate increase`` in the price it is willing to pay -- and perhaps waive the condition that 90 percent of the stock be tendered -- if Revlon`s ``poison pill`` strategy is found to be invalid in court.

A key part of Revlon`s defense in the hostile bid was the repurchase of 10 million shares of its common stock. Each share would be exchanged for $47.50 in subordinated notes paying an 11.75 percent rate of interest, and one-tenth of a share of $9 cumulative convertible exchangeable preferred stock. The measure would be triggered if a bidder not supported by Revlon management bought more than 20 percent of Revlon`s stock.

But last week, Revlon said in an SEC filing that if the notes were issued for a ``substantial portion`` of the ``poison pill`` rights, the result could be the elimination of Revlon`s equity and the impairment of the company`s ability to meet its obligations.

The exchange offer was oversubscribed, Revlon said Friday. Based on a preliminary count, stockholders tendered about 33 million shares, or about 87 percent of Revlon`s shares outstanding, Revlon said. Revlon`s stock closed at $43 Friday, off 87.5 cents. Pantry Pride`s stock closed unchanged at $6.50.